As you know from our previous articles, Virginia has a strong tradition of encouraging land owners to protect their lands from development by utilizing tax incentives. Until now, one of those methods known as Conservation Easements has allowed owners to deduct 30% of their adjusted gross income for 5 years, as a charitable deduction. This has proven to be a strong incentive for land preservation through tax incentives.
With the new legislation, Congress has adjusted those numbers to enhance the appeal of conservation to people of moderate incomes. The new terms will allow 50% of the adjusted gross income to count as a charitable deduction for 15 years…. a time frame that they hope will appeal to more landowners as they do their estate planning for what will happen to their land in the event of their passing.
Landowners should expect the process for approval of this tax credit to take some time, even a year, while their land is carefully evaluated for its wildlife habitats, water quality, heritage preservation, and other environmental issues.
An important component of any conservation easement tax incentive is the right for the landowner to farm, hunt, fish, lease or sell the land according to the conservation easement agreement terms. However, these agreements limit development rights or some other uses of the land in order to protect its conservation value. When land is under a conservation easement, it remains on the tax rolls in its county.
There are various easement programs for landowners under this plan. In our area, many conservation easements are managed by the Virginia Outdoor Foundation (VOF) and the Piedmont Environmental Council (PEC)…. contact them for more details. Or else please feel free to contact us and we’ll provide you with additional resources that may pertain to the conservation of your own land as well as the tax ramifications of buying or selling land that is subject to a conservation easement.